The Verticalization of the Web

As 2001 begins, we can safely say that the Internet has achieved mass adoption and that use of the web has become ubiquitous. Now marketers in general, and B2B marketers in particular, can start taking the web seriously as a vertical marketing tool.

Vertical marketing is a strategy well known to B2B direct marketers, who often use precisely targeted direct mail lists to reach specific individuals with specific job titles who work in companies of a specific size within specific industries.

Those of us who struggle to achieve a similar level of targeting using the Internet know that the medium is not quite as mature as direct mail, but slowly and surely it is getting there.

Try this simple experiment. If you receive any trade journal or business publication that serves your particular discipline (e.g., marketing or human resources) or your company’s industry, see if you can locate that publication’s web site or an e-newsletter issued by the publisher. I’m willing to bet that about 80 percent of the publications you receive have an Internet or web presence, even if it’s meager.

You’ll undoubtedly notice that vertical trade shows, conferences, and associations are fast becoming a heavy presence on the Internet. And as you complete web response forms that provide web sites with industry-specific data, you’ll start receiving more email targeting your industry.

Getting Vertical

This is all indicative of the true verticalization of the web. And while there have been some notable recent failures (such as Ventro pulling the plug on its two vertical marketplaces, Chemdex and Promedix), there is enough critical mass on the web to support a successful vertical strategy.

An often-used example of web verticalization is (what else) VerticalNet. Despite the B2B “dot-gones” of late 2000, VerticalNet continues to hone its B2B vertical strategy with significant success. At present, VerticalNet is running 58 active vertical communities, everything from photonicsonline.com to beverageonline.com to semiconductoronline.com to propertyandcasualty.com to logisticsonline.com to nurses.com. VerticalNet has expanded beyond these vertical B2B communities and now provides value-added services through its VerticalNet Exchanges and VerticalNet Solutions divisions. In December 2000, VerticalNet announced the launch of VerticalNet Japan, which offers seven localized versions of VerticalNet B2B communities.

VerticalNet is one of the better examples of the rapid advance of web verticalization, but there are hundreds of other examples that prove the point just as effectively. Such information-technology supersites as CMPnet.com, ZDNet.com, and IDG’s ITworld.com are excellent examples of verticalization. Within CMPnet are three other subverticals: TechWeb.com for IT professionals, ChannelWeb.com for channel partner organizations, and EDTN.com for electronics-design professionals.

Other good vertical examples, on a less elaborate scale, include PlasticsNet.com (for the plastics industry), WebMD.com (targeted to the healthcare industry), and Enermetrix.com (an energy exchange). Some of these sites are communities where individuals can interrelate, and others are exchanges where individuals can actually conduct business — they can buy from, sell to, and refer business to one another. Regardless of the business model, however, they all fundamentally address the same need: Birds of a feather like to flock together.

Good News for B2B Marketers

Which brings me back to the point I made at the beginning of this column. The movement to web verticalization is really good news for those of us who market to businesses. As media and messages proliferate, marketing becomes a game of efficient differentiation. B2B direct marketers tend to find that their most successful campaigns are the most targeted campaigns. It’s more effective to target the specific concerns of a CFO than those of a senior executive. It’s even more effective to differentiate between a CFO of a smaller company and a CFO of a larger company.

And it’s most effective to address the concerns differently, depending on the industry in which the professionals you’re targeting work. For example, you would address the concerns of a CFO in a telecommunications firm differently than you would address the concerns of a CFO in a bank.

While all of this has been quite possible with targeted direct mail and telemarketing, it has been quite a bit more challenging to execute on the Internet. With the increasing verticalization of the web, marketers can expect it to be a lot easier in the future.

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